The Italian economy is of global importance. Being one of the largest national economies of the EU and a leading country in world trade and export enables its population to advance their financial position and gain private wealth. However structural economic differences between the North and South, furthered by government spending and high levels of public debt triggers a need for protective measures of the financial industry and its stakeholders. The Italian Deposit Guarantee Fund (Fondo Interbancario di Tutela dei Depositi – FITD) provides bank account holders with such protection when their bank fails. FITD coverage slightly deviates from the European directive on Deposit Guarantee Schemes (2014/49/EU) due to the scope, nature and structure of the local economy and corporate ecosystem.
For credit institutions that operate in Italy, membership of the Fondo Interbancario di Tutela dei Depositi (FITD) is compulsary. Account holders of cooperative banks however are protected via the Fondo di Garanzia dei Depositanti del Credito Cooperativo and asset management firms by the Fondo Nazionale di Garanzia. The decisive failure of a financial institution shall be avoided by preventive intervention, restructuring and resolution. Mandatory and voluntary schemes play an important role in these procedures by providing liquidity where it is needed. Close examination is needed to determine the most beneficial and cost-efficient solution for the financial institution in distress. The critical determinant is that the cost of intervention should not exceed the cost for reimbursement of creditors via the FITD fund.
Membership of the FITD fund is mandatory for credit institutions in Italy. These include Italian banks and subsidiaries of non-EU banks licensed in Italy. Members of the fund pay a membership fee and quotas for ordinary contribution based on the number of covered deposits and its institutional risk level, and extraordinary contributions (where needed) to the consortium. Eligible creditors make no contribution to the fund, their account balance is protected as part of their contractual agreement with the bank.
The fund guarantees deposits held by account holders of Italian member banks and their branches in other countries. It also covers bank account holders of subsidiaries of banks headquartered outside the EU and branches of EU banks, provided that they join the fund and pay the mandatory contributions. A high-risk classification is given to financial institutions in distress to monitor their progression and potentially charge higher premiums to cover financial losses. Banks in compulsory administrative liquidation shall cease paying contributions to the fund.
To ensure that the fund is appropriately managed, a board is composed. The chair and 23 members are elected by the general meeting. The board also includes the President of the Associazione Bancaria Italiana (ABI) and a professional member holding adequate competence in banking and finance, yet inactive or connected with a member bank or banking group in an official capacity or employee, for the recent three years.
Fondo Interbancario di Tutela dei Depositi (FITD)
Via del Plebiscito, 102
00186 ROMA (ITALIA)